West is Unlikely to Slap Heavy Economic Sanctions on Russia. Why?

The tone of the statements made from Brussels and Washington and their decisions taken with regard to the Russian Federation, Russian businesses and officials imply that West is unlikely to go beyond ‘cosmetic’ sanctions.

Escalation of the Crimean conflict and the risk of further infiltration of the Russian troops into the continental part of Ukraine have raised a concern about international mechanisms of deterrence of the Kremlin policy, economic sanctions being among them. Although Brussels and Washington made rather harsh statements earlier, it is quite improbable that they will really dare impose heavy sanctions on Moscow. This means that the world community now lacks efficient instruments of influence allowing adequate response to the aggression of the countries with nuclear weapons.

The Russian Federation is the third biggest trade partner of the EU (next to the US and China) with the USD 417.4 billion sales turnover in 2013. That is why the sanctions in question may have the reverse effect and thus cause direct loss of about USD 170 billion to European producers. Considering the current state of the EU economy, the results will be grave. At the same time, it is quite remarkable that where the trade is concerned, the biggest losses will be incurred by the Eastern European countries (except Romania), which will result in yet greater misbalance in the EU economy, strengthen the effect of the centrifugal forces impeding stable economic development of the EU countries, and exacerbate economic issues within the EU in general.

Russia is one of the world’s biggest oil producing countries and the world’s second biggest ‘black gold’ exporter. It supplies most of its oil and gas to the EU countries. Hence, the only way to affect Russian economy is slapping sanctions on it that would target Russia’s energy sector. And this implies refusal from Russia’s natural gas supplies resulting in reduction of its state revenues. In 2013, the country’s earnings from oil export amounted to USD 162 billion, from natural gas export — USD 67 billion.

There are more factors which prevent the EU from ‘punishing’ Russia, such as location of Russia’s sufficient energy assets in Europe, complete influence of 11 EU countries on energy supplies from Russia, close partnership with Germany and the Netherlands in the area of gas supplies.

Out of 485 billion cubic meters of gas consumed by the EU countries annually, Russia supplies about 160 billion cubic meters which is almost one third of the total volume. According to the forecast suggested by governments and energy companies, by 2013 consumption may increase up to 585 billion cubic meters annually, and imports from Russia — up to 175 billion. Therefore, Russia’s share in gas supply to the EU will remain about the same.

In its turn, the dynamic of oil import by the EU 2001 through 2013 shows that, despite general decrease in volumes, Russia’s share has never decreased ever since 2005 — it was Kazakhstan, Libya and Saudi Arabia that reduced their exports. Import of natural gas is currently, quite oppositely, increasing steadily, Russia’s share still being the largest.

Talks about compensation of losses caused by lifting some Iran sanctions are absolutely groundless and economically unjustified.Therefore, ban on Russia’s energy imports will be a blowback to Europe resulting in further aggravation of the current economic crisis. Brussels has no chance to arrange for quick diversification of natural gas supplies. At the same time, sanctions against Russia will result in raising prices for energy resources, which, vice versa, will increase Moscow’s revenues. Moreover, Europe will face economic recession once again, thus negating all anti-crisis programs implemented by Brussels during the last several years. In its turn, this will raise social issues. So neither the US nor the EU will impose an embargo on oil and gas imports from Russia just because the consequences thereof will have too negative an effect on the global market which is expected to see growth of oil consumption up to 92.5 million barrels daily in 2014. Iran’s Minister of Petroleum Bijan Namdar Zangeneh agrees with this forecast.

Russia’s budget for 2014 was calculated based on the average annual oil price of USD 93 per barrel. In case sanctions become a reality, the prices will well exceed USD 130, and the raise will continue. This will bring Russia additional USD 37 from each exported barrel of oil at the least. Let us not forget that in 2013 Russia exported about 234 million tons of oil and liquid gas.

Imposing sanctions against the key Russian energy companies — Gazprom, LUKoil and Rosneft —also seems quite doubtful. Most of them signed field development contracts with a number of American and European oil and gas producing companies. Therefore, the blow to Russian oil and gas producing companies will affect their western partners whose business interests are concentrated in this country.

According to Bob Dudley, the Group Chief Executive and a director of BP — which is one of the largest foreign investor in Russia’s oil producing industry owning a 20% share in one of the world’s biggest oil exporters Rosneft — his company is not going to stop investments in Russia. He underlined that BP is immensely interested in investing in this country. BP produces one fourth of its oil and keeps one third of its oil and gas reserves in Russia.

President of the French company Total Christophe de Margerie promised to continue investing in the USD 26.9 Yamal LNG project where Total’s share amounts to 20%, its project partners being Novatekom and CNPC (China). The partner plan on starting liquid natural gas supplies from the arctic field in 2017. “We are there for a long term,” Margerie told reporters at the IHS CERAWeek energy conference. “Total and Yamal will definitely survive through this crisis and I hope not too many others.” At the same conference, Paolo Scaroni, the Chief Executive of Eni, said that sufficient gas reserves give Russia powerful instruments of influence on Europe. He believes that the worst possible scenario would be complete termination of gas supplies from Russia through Ukraine.

On March 5, after Russian troops invaded Crimea, top managers of the British energy producing company BP and the French Total promised to continue investing in Russia, and CEO of the Italian Eni underlined once again that huge gas reserves allow Moscow to hold control over the whole Europe.

According to Rainer Steele, Chairman of the Board of Directors of Gazprom’s partner Wintershall, sanctions against Russia will not settle the issue and will be ineffective. Philipp Mißfelder, member of the German Parliament, also said that sanctions against Russia will affect Germany, and that sanctions are never a good method for export-oriented Germany. German Minister for Foreign Affairs Frank-Walter Steinmeier doubted that Europe would even dare expel Russia from the G8.

Direct EU investments in Russia’s economy are yet another issue. Thus, foreign direct investments from the Netherlands in Russia amount to 12% of the overall investment outflows from Amsterdam, 4.3% from Germany, 3.4% from France, 30% from Cyprus (mostly reinvestments), 3.8% from Ireland.

Investment outflows from Russia to the EU are also quite considerable: 37% — Cyprus, 15.9% — the Netherlands, 2.5% — Great Britain, 2.2% — Germany. This shows that blocking of bilateral financial flows between Russia and the EU is not reasonable from the economic point of view.According to the disclosed secret documents of the British Parliament, Downing Street also recommends to refrain from closing the British market for Russia, and to not go beyond visa restrictions and exclusion for certain Russian officials. In particular, one of the documents tells that Britain should not impose any trade sanctions or close London’s financial centre for Russian capital.

These recommendations also include evasion of the issue of participation of the North Atlantic Alliance in settling the Crimean conflict. This means that the EU will resort only to some political instruments available to the OSCE and the UN that will be targeted at certain persons and not the whole country.

All in all, Britain and Germany will attempt to not affect their own economy, and this is what will determine further London’s behaviour. We believe that Britain and Germany will only act as diplomats in the Crimean conflict, and they might even try to lobby some nominal sanctions about which the US Senator John McCain gave a hint in his interview after his meeting with the British representatives during which he expressed his disappointment about London’s official standpoint and ignoring history’s lessons on the part of Europe. Basically, he said that the US would like but could not possibly impose certain effective sanctions, and Europe is not ready for such serious measures.

Russia only ranks number 20 among the countries consumers of the US products and is not among the top ten of the countries exporters of goods and services to the US. Therefore, Washington has only financial leverages at its disposal in this situation. Moreover, sanctions similar to Iranian, for example, will affect, and most probably, block economic cooperation between Russia and the EU — scenario which is unacceptable for Brussels. This means that neither the US has any flexible economic leverages against Moscow at their disposal.

That is why Washington now counts on, first of all, imposing sanctions by its European partners aimed at limiting access for the Russian President’s wingmen and partners to their bank accounts and financial flows within the territory of Europe. Therefore, they expect some upward pressure, sparking discontent among the political elite which would make it possible to prepare grounds to exert influence on the Kremlin. However, it is not probable that such measures will turn out to be effective.

It is fair to say that the international checks and balances system elaborated back in 1945 is efficient no more, and the depth of integration of the global economy no longer allows control over the countries with nuclear weapons and critical shares in the global export. In view thereof, despite all the strivings of the world community, there are no more ‘innocent’ leverages to exert effective pressure on such players as Moscow, Washington and Beijing. Any instruments which may help achieve the desired results are going to bring serious consequences for the global economy and the initiators of the sanctions. At the same time, as the ‘Crimean precedent’ may be used without any dramatic consequences only by three countries, and Washington and Brussels understand that no mass chain reaction will follow, and most incidents may be precluded by means of traditional diplomatic and economic instruments.

This means that the world is gradually approaching the new round of the Cold War which today, as strange as it may sound, may have a stimulating effect on the development of the key national economies.

Therefore, according to our forecast, West is likely to resort to financial aid for Ukraine instead of further complicating relations with Russia, thus preventing the risk of economic loss in the context of the current crisis. This means that neither Washington nor Brussels will dare impose serious economic sanctions against Russia. Hence, these instruments are unlikely to considerably influence the Kremlin’s policy with regard to Ukraine in the medium term.

It Is Crucial to Watch Changes among the Russian Elites

Georgia’s and to a large extent any other post-Soviet
state’s foreign policy depends on what happens in/to Russia.

Problems in the Russian economy might be causing
reverberations in Georgia, Moldova, Ukraine, Kazakhstan, etc., but it still is
not a long-term problem. What should matter more fundamentally to us are
internal developments within the Russian ruling class, changes in the
government, struggle among powerful groupings, and relations between the civil
and military branches.

In other words, we need to pay closer attention to the
Russian elites which govern the country and therefore control the country’s
foreign policy. This is important since Russia’s internal situation often has a
bearing on foreign policy, and that is where it matters to us.

To be sure, watching developments in a country’s
ruling elites is crucial for almost every modern state which is geopolitically
active. But with Russia, this is even more important as the political power in
the country does not derive from the people as in the European democracies, but
rather from powerful security and military agencies which enable the central
government in Moscow to control efficiently large swathes of territories,
usually of unfriendly geographic conditions.

The way modern Russian elites operate is very similar
to the way how Soviet and imperial (Romanov) governments worked. Quite
surprisingly, in all the cases Russian elites have been always perceptible of
changing economic or geopolitical situation inside or outside the country.

It is often believed that a ruler, again whether
during the imperial or Soviet times, wielded ultimate power over the fate of
the population and the governing elites. The same notion works for Vladimir
Putin. Westerners often portray him as a sole ruler to all the affairs Russian
and non-Russian and a major voice in what should be done. True, the incumbent
president is powerful, but he gained this authority more as a balancer among
several powerful groups of interests such as military, economic, security,
cultural and numerous smaller factions inside each of these large groups.

To many, it might seem strange and hardly possible
that the Russian president balances rather than rules, but generally a Russian
ruler, despite the historically autocratic models of government, always had to
pay attention to changing winds among the country’s elites. In the beginning,
if all goes badly, the elites might be silent for the fear of oppression, but
slowly and steadily they would always try to influence the government. If this
did not work, the Russian elites would not hesitate to abandon the ‘sinking
ship’.

Indeed, Russian history shows how powerful the Russian
elites are and how vital their support for a government is.

Take the example of the Romanov dynasty before World
War I. There was a big disenchantment with the way the government operated and
once the Tsarist rule failed in the Russo-Japanese war of 1904-1905 and the
WWI, the result was immediate: the elites turned their back on the Romanovs and
the Empire ceased to exist in 1917.

Perhaps an even better example is how the Soviet Union
collapsed in 1991. Though there were military problems, corruption as well as
economic woes, it was still in the minds and hearts of the ruling Russian and
Ukrainian, Georgian and other governing circles that the idea of a common state
failed.

Nowadays, Russia is experiencing serious problems,
ranging from economic and educational to purely geopolitical. There are
occasional signs that the Russian elites are getting more worried about the
future prospects of the country. Where before the Ukrainian crisis there was
still hope of final European-Russian rapprochement and the idea that Russians
had to model themselves on Europe, now this idea is dead.

Thus, along with social and foreign policy troubles,
the Russians are also experiencing a purely spiritual problem. All point to the
fact that there are too many issues which have accumulated during Putin’s rule,
which, surely, will not be easy to change overnight, but there is a growing
understanding that this chosen way is not getting Russia to a spectacularly
good place in the world arena.

This brings us to the pivotal question of what Russia
will be like after Putin. Is a change to the existing status quo possible? Many
developments show that it is a plausible scenario. Considering how many
problems have accumulated and considering how troublesome historically it has
been for the Russian elites to act openly against the government, it is
possible that once Putin is out, internal infighting among elite groups will
take place. As a result, reverberations to foreign policy will follow. It is
not about wishful thinking on the part of the western community, but rather the
result of an analysis of Russian history and the Russian mentality. Almost
always, changes at the top of the government, whether peaceful or otherwise,
have an impact on the foreign and internal situation.

Related

Experts Campaign to Enlist Russia’s Commitment to Africa

Roscongress
Foundation and Integration Expertise LLC (Intex) have signed an agreement on
cooperation between their organizations to work collaboratively on the
“Russia-Africa Shared Vision 2030” in preparation for the forthcoming
Russia-Africa Summit. The agreement directed towards collecting and collating
expert views for the project “Russia-Africa Shared Vision 2030” that
could be incorporated into the final Summit Declaration.

A group of Russian
experts plan to present a comprehensive document titled “Russia-Africa:
Shared Vision 2030” at the forthcoming Russia-Africa Summit scheduled on
23–24 October in Sochi, southern Russian city.

Sochi, located in
southern Russia, has an excellent heritage. In both winter and summer, the city
hosts world-class global international events, such as the Olympics, the World
Festival of Youth and Students, and many others. Sochi has one of the largest
congress complexes in the country.

The key issue
emerging from many policy experts is a fresh call on Russian Government to
seriously review and change some of its policy approach currently implemented
in Africa. It’s necessary to actively use combined forms of activities, an
opportunity to look at the problems and the perspectives of entire Russian-African
partnership and cooperation in different fields from the viewpoints of both
Russian and African politicians, business executives, academic researchers,
diplomats and social activists.

The Russia-Africa
Summit will be the first platform to bring African leaders and business
executive directors to interact and discuss economic cooperation of mutual
interest with Russian counterparts, nearly 30 years after the collapse of the
Soviet Union.

Even as the
historical event draws nearer and nearer with preparations underway, Russian
officials at the Kremlin and Ministries, particularly Ministries of Foreign
Affairs, and Economic Development and Industry, are still lip-tight over what
African leaders have to expect from the Summit.

On the other hand,
competition is rife on the continent, with many foreign countries interested in
Africa. Resultantly, African leaders have been making rational and comparative
choices that enormously support their long-term Sustainable Development Goals
(SDGs).

Roscongress
Foundation along with the Integration Expertise information-analytical company
said in a recent news brief that collaborative writing team of Russian and
African experts have been working on a document that would outline the main
areas for interaction between Russia and African countries.

An expert analysis,
including macroeconomic reviews, and an analysis of political systems and
inter-country development strategies would be used to reach conclusions about
opportunities for cooperation, make recommendations, and define specific goals
for the development of Russian-African relations in the period until 2030.

Anton Kobyakov, an
Adviser to the Russian President, noted that “Russia has traditionally
prioritized developing relations with African countries. Trade and economic
relations as well as investment projects with the countries of the African
continent offer enormous potential. Major Russian businesses view Africa as a
promising place for investment.”

Andrei Kemarsky,
Director of the Department of Africa of the Russian Ministry of Foreign
Affairs, said the work on the series of expert reports united by the common
theme “Russia-Africa Shared Vision 2030” would make a significant
contribution to intensifying Russian-African cooperation and would further
promote Russia’s interests on the African continent.

“This project
seems to be particularly relevant given the fact that the Russia-Africa Summit
is scheduled to be held in Russia with the participation of heads of all
African countries,” Kemarsky said.

In December 2017,
Russian Export Center became a shareholder of Afreximbank. Russian Export
Center is a specialized state development institution, created to provide any
assistance, both financial and non-financial, for Russian exporters looking for
widening their business abroad.

“We are seriously looking at multifaceted
interaction with Africa. Russia has a long historical connection with the
continent since the time African states started gaining their independence.
However, that has lost its momentum in early 90s. It is our major goal now to
rebuild the trust and the connections with the African countries to make the
strong foundation for further business cooperation,” the General Director
of the REC, Andrei Slepnev, told me in an emailed interview.

“We’re
witnessing a clear growing interest from the both sides to establish the new
level of relationships which means it is a perfect timing to boost the economic
agenda we have, create a platform to vocalize these ideas and draw a strong
roadmap for the future,” stressed Slepnev.

“Given the
growing interest in Africa, Russian organizations, both private and public,
need a high-quality guide that will help to avoid at least some of the mistakes
that have already been made and provide pointers on some of the most promising
mechanisms for collaboration,” Roscongress Foundation CEO, Alexander
Stuglev, said.

Alexandra
Arkhangelskaya, a Senior Lecturer at the Moscow High School of Economics said
that Russia and Africa needed each other – “Russia is a vast market not
only for African minerals, but for various other goods and products produced by
African countries.”

Currently, the signs
for Russian-African relations are impressive – declarations of intentions have
been made, already many important bilateral agreements signed – now it remains
to be seen, first of all, how these intentions and agreements would be
implemented in practice with African countries, according to Arkhangelskaya.

During the signing of
an agreement between the Integration Expertise and Roscongress Foundation,
Yevgeny Korendyasov, a Senior Researcher at the Institute of African Studies of
the Russian Academy of Sciences, said that intensifying Russian-African
cooperation was now among the list of current priorities of the Russian
government and the business community.

“Preparations
for the Russia-Africa Summit as a new platform for the Russian-African
partnership are in full swing. In this situation, ensuring that relations
between countries reach a new level requires a rethinking of approaches,
mechanisms, and instruments for cooperation based on their heightened
significance in the new conditions of world politics and economics,”
according to Yevgeny Korendyasov.

Andrei Maslov, an
Expert at the Valdai Discussion Club, noted that Russia’s partnership with the
African continent was also a major focus at the Valdai International
Club’s discussion platform, which hosted
an expert session titled “Russia’s Return to Africa: Interests,
Challenges, and Prospects” held in March 2019.

On March 19, under
the Chairmanship of Yury Ushakov, an Aide to the Russian President Vladimir
Putin, the Organizing Committee on Russia-Africa held its first meeting in
Moscow. The Russia–Africa summit is expected to be attended by roughly 3,000
African businessmen, according to the official meeting report.

As a way to realize
the target goals, a preliminary Russia-Africa Business Dialogue as part of the
St. Petersburg International Economic Forum (SPIEF) will take place on June
6–8, and will be followed by the annual shareholders meeting of African
Export-Import Bank. Russian Export Center became a shareholder in December
2017.

The Roscongress
Foundation, established in 2007, is a socially oriented non-financial
development institution and a major organizer of international business
conventions, together with Russian Export Center are the key institutions
responsible for preparation and holding of the all events. President Vladimir
Putin put forward the Russia—Africa initiative at the BRICS summit (Russia,
Brazil, India, China, and South Africa) in Johannesburg in July 2018.

Related

Russia and North Korea: Key areas for cooperation

The April 25 meeting in Vladivostok between
President Vladimir Putin and Kim Jong-un was their first since the North Korean
leader came to power in 2011. Arriving on his armored train, Kim
Jong-un said that he had always dreamed of visiting Russia and hoped that his
first visit would not be the last.

“We talked about the history of our bilateral relations, about the
current situation and the development of relations between our two countries,”
Vladimir Putin said wrapping up the opening phase of the negotiations, which
lasted for two hours – twice longer than originally planned.

Kim Jong-un said that the two leaders “had a very meaningful and
constructive exchange of views tete-a-tete on all pressing issues of mutual
interest.”

“I am grateful for the wonderful time I have spent here, and I hope that
our negotiations will similarly continue in a useful and constructive
way,” he added.

The talks later continued in an expanded
format and ran for three and a half hours.

“We had a detailed discussion of all issues on our agenda: bilateral
relations, matters related to sanctions, the United Nations, our relations with
the United States and, of course, the central issue of the denuclearization of
the Korean Peninsula, focusing on different aspects of all these problems,”
Vladimir Putin said during the final press conference.

The main outcome of the
talks, however, was the two leaders’ repeated emphasis on the need to restart
the six-party talks on the denuclearization of the Korean Peninsula, as well as
Russia’s readiness to act as a de-facto mediator between Pyongyang and
Washington. Representatives of Russia, North and South Koreas, China, Japan and
the United States regularly met between 2003 and 2008 (under Kim Jong-il), but
those meetings were eventually suspended by Pyongyang following Washington’s
refusal to ease the sanctions regime and its attempts to revise existing
accords.

Ahead of the Vladivostok summit, the US Special Envoy for North Korea,
Stephen Biegun, made a brief visit to Moscow to discuss the terms of the new
Korean settlement parley. The US State Department described the diplomat’s
visit as a desire to “discuss respective bilateral engagements with North
Korea and efforts to achieve the final, fully verified denuclearization of North
Korea.”

However, Mr. Biegun’s
visit only underscored the lingering differences in the negotiating sides’
views on resolving the situation on the Korean Peninsula and regarding the
mechanisms and mutual steps needed to make this happen. While
North Korea, Russia and China are holding out for a phased lifting of sanctions
on Pyongyang in exchange for North Korea gradually rolling back its nuclear
missile program under international security guarantees, the United States
insists on Pyongyang’s prior cessation of its entire nuclear missile
development effort. According to Vladimir Putin, Kim Jong-un then asked him to
convey his position and expectations to Washington.

“Chairman Kim Jong-un personally asked us to inform the American side
about his position and the questions he has about what’s unfolding on the
Korean Peninsula,” Vladimir Putin told reporters after the summit. He
promised to do this at upcoming international forums – including in China, as
part of the Belt and Road Initiative.

The North Korean leader had thus decided to get back to Pyongyang’s
previous practice of “balancing” between the leading world powers in an effort
to achieve maximum possible concessions. This balancing act is important for
Pyongyang primarily with Washington and Moscow – especially after the failure
of the US-North Korean summit held in Hanoi in February.

According to Andrei Kortunov, director of the Russian International
Affairs Council, “Kim Jong-un’s trip to Vladivostok means that he is looking
for outside support amid his stuttering
talks with the United States.”.

“With the failure of the Hanoi summit, Kim Jong-un needs to confirm that
he is generally committed to denuclearization, but within the framework of the
Russian-Chinese phased plan. Donald Trump and his team reject this and demand a
complete denuclearization of the DPRK as a condition for lifting the
sanctions,” Go Myung-hyun of Seoul’s ASAN Institute of
Policy Studies said.

“What Pyongyang now needs following the failure the Vietnam summit
is at least a semblance of minimal diplomatic success,” Andrei Lankov, a
professor at Kookmin University in Seoul, said.

The list of countries Kim Jong-un can now turn to for diplomatic support
is very short. These are essentially Russia and China. However, his visit to
Beijing is not in the best interest of China, which is currently locked in
tense trade negotiations with the United States.

Therefore, Kim Jong-un apparently hopes that his talks with Russia will
send a signal to Washington that since political pressure on Pyongyang is not
working, the Americans should proceed to a phased lifting of sanctions against
North Korea in exchange for Pyongyang partially coming across on its nuclear
missile program.

“North Korea’s strategy always has been walking a tight-rope between the
conflicts of the world powers and getting concessions that way,” the BBC
commented.

With the successful
Russian-North Korean summit, which reaffirmed the two countries’ shared desire
to breathe new vigor into the Korean settlement process, the ball is now in the
US court, and President Trump’s well-known predilection for quick fixes and
spectacular moves inspires hope for his next, third, meeting with Kim Jong-un.

During his recent visit to Washington, South Korean President Moon
Jae-in underscored the need for a new such meeting between Trump and Kim. When
meeting with Donald Trump, President Moon stressed that his “important task” is
to “maintain the momentum of dialogue” toward North Korea’s denuclearization
while expressing “the positive outlook, regarding the third US-North Korea
summit, to the international community that this will be held in the near
future.” Donald Trump responded in his peremptory manner: “I enjoy the summits,
I enjoy being with the chairman,” he said, adding that his previous meetings
with the North Korean leader had been “really productive.”

Although there has been no word yet about when exactly this meeting
could happen, Kim Jong-un has already made it clear that he is ready “to
be patient and wait for the American president by the end of the year.”

Seoul, another target of
Pyongyang’s political signals, factors in very importantly in the diplomatic
activity currently swirling around North Korea.

“Kim launched the inter-Korean phase of the “new way” immediately after
the meeting in Hanoi. It involves ratcheting up pressure on South Korea to
demonstrate greater independence from the US,” The Hill commented.

“Of course, while it is awkward for South Korea to say so openly, there
is no gainsaying the fact that the failure to make really meaningful progress
in implementing the detailed agreements negotiated during the inter-Korean
summits in Panmunjom and Pyongyang is due to the constraints imposed by South
Korea’s support for the US’ North Korea policy.”

“South Koreans truly may be the most effective mediators precisely
because they are caught between the parties: the Americans with whom they share
long-term, common interests; and the North Koreans with whom they share an
existential, common national identity,” the publication concluded.

In addition to general
political issues and the problem of the denuclearization of the Korean
Peninsula, economic projects in energy and infrastructure, including the
construction of a gas pipeline and a railway line linking the two countries are
an equally important aspect of cooperation between Russia and North Korea.

All these things, however, depend very much on the overall situation on
the Korean Peninsula and the prospects for the normalization of inter-Korean
relations.

“I spoke about this. We have been talking about this matter
for many years. This includes direct railway traffic between South Korea,
North Korea and Russia, including our Trans-Siberian Mainline,
opportunities for laying pipelines – we can talk about both oil
and gas, as well as the possible construction of new
power transmission lines. All of this is possible. Moreover,
in my opinion, this also meets the interests
of the Republic of Korea, I have always had this
impression. But, apparently, there is a shortage of sovereignty
during the adoption of final decisions, and the Republic
of Korea has certain allied obligations to the United States.
Therefore, everything stops at a certain moment. As I see
it, if these and other similar projects were implemented, this would
create essential conditions for increasing trust, which is vitally needed
to resolve various problems,” President Vladimir Putin said about this
particular aspect of the talks with his North Korean counterpart.

Any further progress in
the Korean settlement process depends directly on the kind of relationship we
are going to see happening within the framework of the “six” world
powers. Anyway, the summit, which has just closed up shop in Vladivostok, gives
reasons for optimism.